- Firms with effective culture have a commitment to high standards and values which shape the behaviours and mindsets within a firm
- Over 10 years the Fitness & Probity regime has been instrumental in the work of the Central Bank in seeking to ensure the right people occupy key roles in regulated firms
- The Central Bank launches the Fitness & Probity Interview Guide to assist applicants and firms
The Central Bank’s Director General, Financial Conduct, Derville Rowland spoke at a webinar at the Institute of Directors today (10 June 2021) where she provided an overview of the importance of effective culture in firms and the relationship of the fitness and probity regime to good culture.
On culture, the Director General said that culture is “a matter for each individual firm in the first instance”. She added, however, that the “evidence is continually increasing in the financial services sector that ineffective culture is bad for business – both for a firm itself and the consumers or investors it serves.” Ms Rowland said that “firms are responsible for selling their customers products that meet their needs both now and in to the future. There is, therefore, an onus on firms to have effective cultures and set the right standards. These standards must be reflected across a firm in every aspect of how it conducts its business, from corporate governance structures to individual accountability; from strategy-setting to product development; from risk management to people management; and from internal challenge to how whistle-blowers are treated.”
Ms Rowland assessed the impact of the Fitness & Probity (F&P) regime since its introduction 10 years ago. “The F&P regime seeks to ensure that regulated firms and individuals who work in those firms are committed to high standards of competence, integrity and honesty, and are held to account when they fall below these standards. The regime has been instrumental in our work in seeking to ensure that the right people occupy key roles in the firms we regulate”.
In addition, Ms Rowland launched a new publication, the Fitness & Probity Interview Guide to assist applicants for certain senior roles who have been called to attend an F&P interview with the Central Bank. The Guide sets out for Pre-Approval Controlled Function (PCF) applicants and firms the practicalities around attending both assessment and specific interviews.
On the the Individual Accountability Framework, Ms Rowland said that it is viewed as “very much complementary … to the existing F&P regime”. Ms Rowland added that it will “result in improved governance across the financial sector”.
The Director General said that there is a strong link between diversity and inclusion and culture. She said that “Firms should rethink their governance structures, processes, policies and procedures including talent management through a D&I lens”.
This news item was originally published by the Central Bank of Ireland (CBI IE). For more information, please see the Source Link.